Key points in the Budget

THE ECONOMY

■■The Office for Budget Responsibility (OBR) is now forecasting “a swifter and more sustained recovery” than they expected in November, predicting the economy will be 3% smaller than it would have been in five years’ time because of the coronavirus crisis. ■■But the economy, according to the OBR, is forecast to grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast.

■■Borrowing is forecast to be £234bn – 10.3% of gross domestic product (GDP), a measure of the size of the economy – but will fall to 4.5% of GDP in 2022-23, 3.5% in 2023-24, then 2.9% and 2.8% in the following two years.

■■The measures to support the economy amounted to £65bn over this year and next, taking the total Government support to £407bn over that period, Mr Sunak said.

CORONAVIRUS SUPPORT

■■The furlough scheme will be extended to the end of September, as will support for the self-employed. ■■The Universal Credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown.

■■The Chancellor confirmed an additional £1.6bn for the coronavirus vaccine rollout and to “improve future preparedness”.

■■The business rates holiday for the retail, hospitality and leisure sectors will continue until the end of June, and will be discounted by two thirds for the remaining nine months of the year. ■■The 5% reduced rate of VAT for the tourism and hospitality sector will be extended for six months to the end of September, with an interim rate of 12.5% for another six months after that.

■■A Recovery Loan Scheme will replace previous loan packages, allowing businesses of any size to apply for loans from £25,000 up to £10m.

TAXATION

■■The rate of corporation tax, paid on company profits, will increase to 25% in April 2023 – but small businesses with profits of £50,000 or less will continue to be taxed at 19%. ■■There will be a “super deduction” for companies when they invest, reducing their tax bill by 130% of the cost for the next two years. ■■Rates of income tax, national insurance and VAT kept at the same level but personal tax thresholds will increase next month and be held at those rates until April 2026. ■■The inheritance tax threshold and the pensions lifetime allowance will be maintained at their current levels, along with the annual exempt amount in capital gains tax, until April 2026 and, for two years from April 2022, the VAT registration threshold.

OTHER ANNOUNCEMENTS

■■The minimum wage will increase to £8.91 an hour from April.

■■On apprenticeships, the Government is to double the incentive payments given to businesses to £3,000 for all new hires, of any age. ■■All alcohol duties are frozen for the second year in a row and the planned increase in fuel duty is also cancelled. ■■A “mortgage guarantee” was announced.

■■The UK Infrastructure Bank will be located in Leeds. ■■Freeports will be located at East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside. ■■An extra £19m will be handed to domestic violence programmes. ■■Survivors of the Thalidomide scandal will be given a “lifetime commitment” with an extra down payment of £40m.